Wonky price action the FX markets as the U.K. GDP data surprise sparked volatility in Sterling, and the Aussie continued to flounder in the morning London session.

Major Events/Reports:

U.K. GDP beats forecast – It looks like there was no immediate recession in the U.K. after Brexit as the economy posted a rise of 2.3% y/y, better than the 2.1% annualized rate last quarter. This greatly reduces the odds of the Bank of England taking easing actions on monetary policy, so it’s no surprise Sterling saw a boost after the data release. Keep in mind that this was the first look at third quarter GDP, meaning volatility and momentum may be short lived for Sterling.

Aussie continues weakness – The Australian dollar continued to trade lower in the morning London session, a move that was possibly sparked by a reversal of sentiment on yesterday’s positive CPI reports. According to economist Emily Dabbs from Moody’s Analytics, the data was not as strong as it appears without the rise in fruit and vegetable prices. Whatever the direct cause may be, the Aussie is seeing red across the board with strong momentum.

Low volatility but risk sentiment rising – A lack of major events makes for a boring trading session, but European equity markets are rallying up from session lows:

The pan-European FTSEurofirst 300 was down by 0.07% to 1,348.87

The blue-chip Euro Stoxx 50 was down by 0.14% to 3,076.62

The U.K.’s FTSE 100 was down 0.03% to 6,955.95

The DAX was down by 0.06% to 10,703.43

And the U.S. markets are set to open higher according to futures trading: